THE PRESIDENT: Thanks for coming. Thank you all. Please be seated.
Billy, thank you. I asked Billy where he works. He said, well, I run
Sunny Delight beverage company. I said, well, Billy, I quit drinking.
(Laughter.) He said, that's not that kind of alcohol.

I thank you all for having me. Billy, thank you for your kind words. He's
from Cincinnati. I was in Cincinnati the other day, stopped off and got
some ribs, and he tried to ask me to compare Texas ribs with Cincinnati
ribs. That's a little unfair. (Laughter.) But they're awfully good,
Billy.

I appreciate you having me for this fall conference. I'm thrilled to be a
sitting President coming to visit with you. I didn't realize the last one
was Eisenhower. I don't know if he came on Halloween -- (laughter) -- but
I did. (Laughter.) It's always an interesting day here in the Nation's
Capital. This morning I was with the Vice President. I was asking him
what costume he was planning. He said, well, I'm already wearing it.
(Laughter.) Then he mumbled something about the dark side of the force.
(Laughter.) He's doing well.

I want to talk today about health care. There's an interesting debate
raging here in Washington, and it's an appropriate -- Halloween is an
appropriate day to talk about it, because there's a bill moving through the
Congress that's disguised as a bill to help children, but I think it's
really a trick on the American people. I'm going to spend some time
explaining why I have made some decisions I have made regarding this piece
of legislation.

The bill that I'm going to discuss would cause moms and dads to give up
private insurance and -- private insurance for their children and move them
on to the government rolls. It would move us closer to a health care
system dominated by the federal government. It would fund massive new
spending by raising taxes on the American working people. I believe the
legislation I'm going to talk to you today -- about which I'm going to talk
to you today is a path to government-run health care, which I believe is
the wrong path for the United States.

And I vetoed a bill -- as Billy noted, the spotlight can be quite bright
when the President either shows up or does something. And I vetoed a piece
of legislation. And I appreciate your giving me a chance to come by and
explain to you and the American people why I did so. But before I do, I do
want to thank you all very much for giving me a chance to come by. The
White House is a nice place to live, but sometimes it's good to get outside
the White House, to be with people who are actually making a living --
(laughter) -- that are creating jobs; that are taking risk; that are
really, I hope, living the American Dream.

Laura sends her best. She's doing great. I am truly a lucky man to have
married this great woman and I think the country is lucky to have her as
the First Lady. (Applause.)

I want to thank Mary Fallin from Oklahoma, Congresswoman from Oklahoma, for
joining us. Mary, thank you for being here. I particularly want to say
something about Cal Dooley. I worked with him when he was a member of the
United States Congress. I found him to be a good, honest guy. When he
said he was going to do something, he would do it. And I don't know if
this helps him or hurts him, but you made a pretty smart move to hire him.
(Laughter.) And I'm proud to be with you, Cal. Thanks for being here.
(Applause.)

One of the reasons I've come by is to remind you how important you are to
our economy. In other words, I'm the kind of person who believes that it's
important for those of us in government to encourage people to take risk
and to take investment. I like to remind people one of the key
cornerstones of my philosophy is, I don't believe the role of government is
to try to create wealth. It's to create the environment in which people
are willing to risk capital, to expand their businesses. And I appreciate
the fact that every day you're doing that. I appreciate the fact that you
have to worry about what your customers think; that you tailor your goods
and services to meet somebody else's demand. I appreciate the fact that by
providing a place for people to work, you help American families. And I
appreciate the fact that you've been a part of a remarkable economy.

Just this morning, we learned that the economic growth in the third quarter
was 3.9 percent. You hear people talking about whether our economy is
strong or not; well, here's an indication that it's strong. A lot of that
has to do with the ability for people to dream big dreams and to follow
through on those dreams. I love the fact that people say, I own a
business. Ownership is a central part of making sure this country is a
helpful -- hopeful country.

I also am pleased to report to you that last September was America's 49th
consecutive month of job creation. It's the longest period of
uninterrupted job growth on record. A lot of that has to do with the fact
that we cut your taxes. There's a huge debate in Washington about cutting
taxes. I believe if you've got more money in your treasuries to spend,
it's more likely somebody is going to find work. I believe when American
families have more money in their pockets to save, invest, or spend, it
helps keep the economy strong. I believe you can spend your money better
than the federal government can spend your money.

That's the philosophy behind the tax cuts we have passed, and I appreciate
you supporting pro-growth economic policies. You understand that small
businesses work best when there's more money at -- in circulation amongst
small businesses. Today, this afternoon, I'm going to sign into law an
extension of the Internet tax moratorium. We're making some progress in
convincing people in Washington that low taxes ought to be memorialized in
permanent policy.

Pro-growth economic policies work. That's one of the things I want to
share with you. In order to get out of a recession and recover from an
attack on the United States, we cut taxes on everybody who pays taxes,
because I'm not the kind of person that says, we're going to cut taxes on
you because of your political affiliation and not because of you -- on you
because of yours. I believe if you cut taxes, the only way to
-- fair way to do so is to cut taxes on everybody who pays income taxes.
And that's precisely what we did. And cutting taxes caused our economy to
not only recover, but grow, just like I told you -- 3.9 percent in the
third quarter, for example.

And when the economy grows, it yields more tax revenues. And by holding
down spending, it means -- and by the way, setting priorities such as
funding our troops when they're in harm's way -- it means you can keep
taxes low, grow the economy, set fiscal priorities, and reduce the deficit.
And that's what's happening, as I speak. And it's important for Congress
not to unwind this process by trying to raise your taxes. And I'm going to
use my veto pen to prevent them from doing so. (Applause.)

I appreciate your support for free trade. That's another controversial
subject. I believe opening markets for American goods and services will
help us remain a prosperous nation. I worry about protectionist sentiments
in America that say, well, we don't particularly think we can compete, so
let's just wall us off. I believe that would be a mistake for the United
States of America. So I look forward to working with Cal and your
organization to convince the Congress to pass important free trade
agreements that we have negotiated with Peru and Colombia and Panama and
South Korea.

The United States of America must understand that there are millions of
potential customers around the world. And it makes sense to open up
markets for U.S. goods and services, so that -- so we can compete on a
level playing field. I want our cattlemen to understand that I spend a lot
of time working to open up markets for U.S. beef around the world. I think
it's good for agriculture to say, let's trade. And so we'll continue to
press it. But I'm going to need your help convincing members of Congress
that it's in the national interest to be confident about our capacity to
compete, and it's in our national interest to make sure we have free and
fair trade.

We're going to work together to secure the food supply. I think it's in
the nation's interest to work to deal with childhood obesity. And I think
it's in the nation's interest to expand investment in alternative energy
sources. The reason why is, dependency on oil is not good for the United
States of America. It's not good for economic security, nor is it good for
national security. I really don't like to have our country in the position
where if demand for oil goes up in the developing world, it causes your
gasoline prices to go up. We shouldn't be in the position where if
somebody decides to blow up a oil infrastructure in another country it
causes your gasoline prices to go up.

And I also understand that alternative sources of energy will make us
better stewards of the environment. And one way to become less dependent
on oil is to be able to grow products that empower our automobiles. And
that's why I'm such a big believer in ethanol. I fully understand that
folks out there are concerned about the price of corn. I hear from my
hog-raising buddies that ethanol -- driving cars with corn is causing them
to have trouble feeding their hogs. And that's why we're spending some of
your money on new technologies that will enable us to use wood chips or
switchgrass to be able to be the source for ethanol. It's called
cellulosic ethanol.

You just got to know you're talking to -- you're listening to somebody --
you're not talking, you're listening -- (laughter) -- to somebody who has
got great faith in the capacity of America to use technologies -- to
develop technologies and use technologies to deal with significant
problems, so long as the government makes it clear these are priorities.
And I want to thank you for helping us on those issues. (Applause.)

Speaking about agriculture, this afternoon I'm going to name a new
Secretary of Agriculture. I'm not going to tell you who it is, because I'm
trying to -- (laughter) -- but I think you'll like him. He understands
agriculture, of course, and he'll be a good follow-on to Mike Johanns, who
did a superb job as the Secretary of Agriculture. And I'm going to ask the
Senate, of course, to confirm this person as quickly as possible.

I do want to spend some time on health care. I'm fully aware that this is
a topic that is of concern to you, as it should be. And it's a concern to
all families across the country. It's a topic of heated debate here in
Washington. And at the root of the debate is a philosophical disagreement
over the direction American health care -- good people who have a different
opinion on what we ought to be doing.

Here's my philosophy -- that government ought to trust private medicine;
that we've got a fabulous health care system. Does it have issues? Sure,
it's got issues. But when you compare it to other health care systems in
the world, the United States has got a fabulous health care system. We got
great docs, we've got wonderful new technologies. Our system is so good
that many people from around the world like to come here to get treatment.
The goal of a good health care system is not to weaken the health care
system, but strengthen it; and a goal is to bring as many Americans as
possible into the private system of health care. That ought to be a goal.
And the reason why that ought to be a goal is because private coverage
offers choice, which is good for consumers; flexibility, which is good for
consumers; and quality of care that comes from competition. Private
coverage puts the medical decisions in the right hands, and that's between
the patient and the doctor. And that's where the decisions in health care
should be.

There's a different view in Washington. They believe -- those who have a
different view believe that expanding federal control is the key to
improving health care. Again, I repeat, these are good folks; they care
about our country as much as I care about our country. They just have a
different vision about how to deal with the health issues. At the center
of their belief is that folks in Washington are in a -- the best position
to decide which diseases should be treated, which procedures you can have,
and which doctors you're allowed to see. That's the essence of
federalization of health care. They believe that massive tax increases are
the best way to fund their plans. The truth of the matter is, if you
federalize health care, you're going to have to have a massive tax increase
to pay for it.

For those who believe that, I would hope they would look around the world
at other nations who have tried to nationalize their health care systems.
I think what they would find is that socialized medicine has led to lower
standards, longer waits, rationing of care. We've tried, by the way, here
in Washington to have a -- to have a major effort, put the federal
government square in the center of health care in 1994, and the legislation
didn't pass. I believe many of the Democrats in Congress who supported
that legislation have learned from the experience. So instead of pushing
to federalize health care all at once, they're pushing for the same goal
through a series of incremental steps. With each step, they want to bring
America closer to a nationalized system where the government dictates the
medical coverage for every citizen.

The strategy is to expand programs for senior citizens to include younger
citizens, to expand programs for children to include adults, and to expand
programs for the poor to include the middle class. I'm not making it up.
I would remind you that some in Congress recently proposed to lower the
eligibility age for Medicare, which would allow younger citizens onto the
federal program. And we can now see the strategy clearly when you analyze
the efforts to expand the State Children's Health Insurance Program --
that's the -- that's the issue I was going to talk to you about; SCHIP it's
called.

SCHIP was created to provide coverage for poor and uninsured children whose
parents make too much money to qualify for Medicaid. Let me make sure you
understand the facts. When people say we're not providing money for poor
children, they're overlooking the $35.5 billion a year of your money we
spend on poor children through Medicaid. There is a robust program to make
sure poor children in America get health care. And that's good. If you're
poor and can't afford health care, that's a -- a good role of the
government is to help you.

SCHIP was to help people who couldn't quite qualify for Medicaid to get
help, and I supported the program. I supported the program as the governor
of Texas, and I support the program as President of the United States. And
that's why the budget I submitted this year increases SCHIP funding by 20
percent over five years. So you're looking at a supporter of the program.
As a matter of fact, I sent a signal to Congress that if we need some more
money to focus on poor children, we'll help them find the money, without
raising your taxes.

And I said we got to make sure it stays focused on poor children because a
half-a-million children who qualify for the program aren't on the program
today. The program said, we're going to help poor children; there's a
half-a-million children who qualify for the program who aren't enrolled.
Now, it seems like to me it makes sense that the government ought to focus
on enrolling those who qualify now and not expanding the program beyond its
current reach.

But remember, the primary goal is to increase the federal reach into health
care. So earlier this month they sent me a bill that would expand SCHIP
far beyond its original purpose. Under the proposal that came to my desk,
more than half the children in America could be eligible for government
health care. In other words, by expanding eligibility, it means that more
than half the children in America would become eligible for this federal
program. And to fund it they would raise taxes. That's bad health policy,
as far as I'm concerned, it's bad tax policy, and it's going to take the
country in the wrong direction.

And let me explain why. According to the Congress's own Budget Office, the
bill Congress passed would lead one out of every three children who moves
on to government coverage to drop private health insurance. The government
provides incentives to join the federal program, and people go from private
health care to government health care. That is the wrong direction if you
believe that private medicine -- private health care is the best medicine
possible for the American people.

Some of those children's parents that would be moving make nearly $62,000 a
year. As a matter of fact, the bill I vetoed would raise eligibility in
some places up to $83,000 a year. That's not poor. That's an indication
that there's a strategy afoot to expand the federal reach into health care.
In all, 2 million American children would move from private insurance to
the government program, and at the same time, as I told you, some of the
poorest children who are eligible for SCHIP may not be -- may still not be
enrolled. And adults would still be on the children's program. In about
seven states in America, they've used the SCHIP money -- they're spending
more money on adults than they are on children. So adults would still be
enrolled in the children's program. You might call that an extended trip
to the fountain of youth. (Laughter.) And the taxes they're going to
raise to pay for it would fall on the working people.

So that's why I vetoed the bill. I believe that private medicine is in the
best interest of the country. That's the principle on which I'm operating,
and when I got a bill that would undermine that principle, I vetoed it.
And my veto was sustained. And then I put out the word to Congress, I'd
like to work with you on a better bill. And unfortunately, the goodwill
has not yet been returned.

I named three members of my administration to hold discussions with
Congress, two Cabinet officials and a senior advisor. I said, here's three
people that can speak for me; I'd like them to come up and sit down with
you in good faith, to negotiate a way to make sure poor children get the
help they need. Unfortunately, the leaders wouldn't meet with them, nor
would their designated representatives. Instead, the House of
Representatives made a few adjustments at the margins of the bill and
passed it again.

Now, the bill has the same major flaws. It fails to cover poor children
first, it shift [sic] children with private insurance onto the government
rolls, and it uses taxpayers' dollars to subsidize middle class families,
and finally it raises taxes. But to be fair, there is one part of the bill
that leaders in Congress changed. Somehow they managed to make this
version cost even more over the next five years than the last version.
(Laughter.)

If Congress sends this bill back to me, I'm going to veto it again. They
know this. I mean, they've made it -- I made it perfectly clear that if
you keep passing this piece of legislation, I'm going to keep vetoing it --
unless, of course, it's a piece of legislation that focuses on poor
children and does not expand the reach of the federal government into
health care.

They also understand that the veto that was sustained in the House will be
sustained again. And yet, incredibly enough, the Senate is going to debate
this issue. I view this as a pure political exercise, and I urge the
Senate not to waste time on a bill that they know I will veto and will be
sustained. Whatever our differences, we need to keep the important program
going. I understand that. No poor child should lose health care because
of Washington, D.C. politics.

Philosophical divide isn't going to go away anytime soon, but there are
some common sense steps that Republicans and Democrats can do to help
Americans who struggle with health care. There's some positive things that
we can do. For example, Congress should expand innovative products known
as health savings accounts, which allow people to pay lower insurance
premiums, to save tax-free for routine medical expenses, and to be able to
take such an account from job to job.

You know, a startling statistic is that if you're 30 years old, you
probably have worked five, six, or seven jobs by the time you reach 30 --
this is a very mobile work force. And it seems like to me that we ought to
have products that enable somebody to take their own insurance policy with
them from job to job, and a health savings account is such a policy. And
if you're a small business owner, I strongly urge you to take a look at
health savings accounts for your employees.

Congress should pass association health plans, which enables small
businesses to pool risk across jurisdictional boundaries, so you can buy
insurance at the same discounts that large companies can. If Congress
truly is worried about the rising cost of health care, they ought to enable
small employers to pool risk; in other words, to be able to accumulate a
large risk pool, so you can better afford insurance for your employees.

Congress should pass medical liability reform. These junk lawsuits are
running good doctors out of practice and are running up the cost of your
health care bills. And if they want to address the rising cost in health
care they need to join me and pass substantive medical liability reform at
the federal level.

When I first came to Washington, I said, well, maybe this isn't the proper
federal role; we'll let the states handle it. And then when I became to
analyze the cost to the federal government of these junk lawsuits I
determined it was a federal role to do something about them. I mean, after
all, we're a huge health care provider; we have Medicare, Medicaid,
veterans' benefits, veterans' health care. Yet many of the doctors who we
hire to provide services practice defensive medicine, so that if they get
sued they got a case in the courthouse that can defend them. These junk
lawsuits are running up the cost of medicine for you, and they're running
up the cost of medicine for the federal government -- which is you. And if
the Congress is seriously -- wants to do something seriously about solving
this problem, they ought to pass medical liability reform now. (Applause.)

The amazing thing about health care, it's -- when it comes to information
technology, they're light years behind a lot of America. Perhaps the best
way to describe it is, is that we still got doctors handwriting files.
They don't write very well to begin with, and files get lost. Health care
ought to be using information technology -- and the federal government, by
the way, is insisting that that be the case with the people with whom we
interface. And Congress ought to focus on spreading information technology
throughout health care. The dream is, is that all of us will have a -- our
medical records on a little disk, a little chip that we can carry with us,
that will be secure from prying eyes, but nevertheless, will be a part of
wringing out cost inefficiencies in a industry that needs to have cost
inefficiencies wrung out.

And finally, there ought to be more transparence. I mean, the whole
purpose of reform is to have more consumerism in health care, not less, as
a result of the federal government taking over the health care system. And
in order to have consumerism there has to be transparency in pricing and
quality of care. And the best way to encourage consumerism is to change
the tax code.

Right now our tax code discriminates against people who are trying to buy
and individual policy. If you work for corporate America you get a tax
benefit. If you're on your own, you have to buy health insurance with
after-tax money. And as a result of this discrepancy in the tax code, it
is much harder for an individualized market to take root in America. And
therefore, Congress ought to level the playing field for every American
family, and to make sure that private medicine is enhanced by fairness in
the tax code.

There are different opinions in Congress about which type of tax benefit
would work the best -- a tax deduction, or a tax credit. Both of the
proposals have their advantages, and either would be a lot better than
federalizing health care in America. Taken together, the comprehensive set
of reforms I just outlined would do far more to reduce the ranks of the
uninsured than SCHIP expansion would. They'd make private insurance more
affordable for millions of Americans. And Congress, rather than passing
legislation that's not going to pass -- not going to become law, ought to
focus on practical, common-sense reforms.

Especially a bad time for Congress to stage political theater on health
care because it's got a lot of other work to do in other areas. We're now
10 full months into 2007, and the United States Congress has yet to pass a
single one of the annual spending bills of the federal government.
Considering how eager they are to spend your money, it's shocking it's
taken so long to do so. (Laughter.) In fact, the leaders on Capitol Hill
now hold a dubious record as the first United States Congress in 20 years
that has failed to send a single annual appropriations bill to the
President this late in the year. And time is running short. Members of
Congress needs to pass these annual spending bills soon, one at a time.

They should start by sending me a clean bill to fund our veterans by
Veterans Day. I feel a special obligation to make sure that our veterans
get the full support of the federal government. And Congress needs to stop
wasting time and get that VA bill to my desk. (Applause.) We have got
troops in harm's way. And regardless of your opinion, or members of
Congress' opinion, on this war they ought to put aside those opinions and
focus on those troops and their families. Instead of playing politics on
the floor of the House and the Senate, they need to pass the defense
appropriations bill now to support the troops. (Applause.)

This SCHIP debate is an important debate because it's going to send an
important signal as these other appropriations bills move through Congress.
If we overspend and raise taxes on this bill, it's going to create a bad
habit for the members of Congress. I think it's very important for people
to understand that we can balance this budget and grow this economy if
we're wise about how we spend your money, if we set priorities.

It's also important for members of Congress to understand, with federal
revenues at an all-time high and the deficit declining, now is not the time
to raise taxes. Running up the taxes on the American people would be bad
for our economy; more importantly, it would be bad for American families.
I want you to have more money, so you can make the decisions for your
families and yourself that you think are necessary. I like it when the
after-tax revenues -- income are up. I think it's good for America that
American families are able to save for their children's education, or small
businesses have more money to invest. And the surest way to dilute that
spirit of entrepreneurship is to run your taxes up. And that's why I'm
going to use my veto pen to prevent people from doing it. (Applause.)

You know, we're living during challenging times. I view -- but I view
these as exciting times, as well. I genuinely do. I think we're laying
the foundation of peace for your children and grandchildren. I know it's
necessary to do the hard work now so the first chapters of the 21st century
will be positive chapters.

I firmly believe that the spread of liberty is going to make it such that
when people look back at this period of time, they say, thank God America
had faith in certain values, certain fundamental truths. And one of those
truths is that there is an Almighty, and a gift of that Almighty to every
man, woman and child is freedom. And another historical truth is freedom
yields the peace we want. And at home, freedom for people to invest and to
make choices is important for a hopeful America. Government must trust the
American people. We must trust the American people with your money; we
must trust the American people as you make important decisions in health
care; and we must trust the American people to continue to be the
compassionate people that we are.

It's an honor to represent you. May God bless you and may God continue to
bless our country. (Applause.)